Rob Reich Slams Ray Dalio's Inaction Over Giant Hedge Funds Pushing Companies To Squeeze Out Profits: 'Worse Than Hypocrisy'

Former Labor Secretary Robert Reich has criticized Ray Dalio, founder and board member of Bridgewater Associates, saying the latter hasn't proposed stopping giant hedge funds and private equity funds from forcing companies to squeeze out every ounce of profits, typically by suppressing wages and abandoning workers and communities.

In a Substack post titled "Worse than hypocrisy: Ray Dalio and the heart of darkest capitalism," Reich observed that hedge fund managers classify much of their income as "capital gains" which are taxed at a far lower rate than regular income.

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“Their wealth has given them so much political clout that this absurd ‘carried interest’ tax loophole remains, despite promises from the last four presidents to close it. So while schoolteachers and cops face a marginal tax rate of 25 percent, hedge fund managers like Dalio have for years paid only 15 percent on their enormous incomes,” Reich said in his post.

Reich cited Dalio on "how the system is not working well for the majority of Americans because it's producing self-reinforcing spirals up for the haves and down for the have-nots."

Dalio and his compatriots are part of that self-reinforcing spiral, Reich said adding that "the rest of us are all the worse for it."

Pension Funds: In a note to pension fund managers, Reich advised them to "get the hell out of hedge funds."

"You're wasting the retirement money of the workers you're supposed to represent," Reich said.

Reich also advised pension fund managers that if they absolutely have to be in hedge funds, they must make their voices heard on taming executive pay.

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Photo courtesy: World Economic Forum on Flickr